An acknowledgement from the Prime Minister today that there are issues with China.

The Chinese ambassador to New Zealand Madam Wu XI said in Wellington last night both countries needed to build a more resilient relationship and handle differences properly to avoid the rocks.

Madam Wu Xi alluded to news headlines about strained relations while speaking at a reception hosted by the New Zealand – China Council at Te Papa.

She says as our two countries differ in history, culture and social systems, it's only natural for us to have differences.

Jacinda Ardern says the relationship's healthy, while recognising the challenges.

At last night's reception, neither the Chinese ambassador nor Ardern raised issues that have strained relations most, a preliminary decision in late November by New Zealand's foreign intelligence agency the GCSB to ban Huawei from Spark's 5G plans.

Also today, New Zealand's Miniature Horse Association is hoping the perpetrator of a vicious attack is brought to justice, after a horse died after being stabbed 41 times.

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Google and Facebook are among the internet giants facing a surprise tax.

That's news that has just been broken by the New Zealand Herald and Newstalk ZB, and confirmed by the Prime Minister.

The issue is multinational companies selling good or services online, and then running profits through low-tax countries.

It's been a looming issue in New Zealand for several years.

The Herald tax gap investigation into corporate tax avoidance in 2016 found 20 of the most aggressive multinational companies recorded $10b in annual revenues but collectively paid less than $1.8m in corporate income taxes.

And a report set to be released later this week could see the rest of us paying a capital gains tax.

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New Zealand's biggest seafood exporter Sanford is having issues getting salmon through Chinese ports.

It comes as suspicions grow that China is turning up the heat on this country because of the Huawei saga.

Sanford is not attributing its recent administrative issues getting shipments cleared to the deteriorating New Zealand-China relationship, but chief customer officer Andre Gargiulo says no reason has been given for the issues which have impacted several shipments of fresh salmon since the end of last month.

China is the biggest export market for many New Zealand primary products, including dairy, seafood and kiwifruit.

The tourism industry is also concerned.

The English version of the People's Daily newspaper says New Zealand has fallen out of favour with some Chinese travellers.

The paper is regarded as the mouthpiece of the Chinese government.

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Reserve Bank Governor Adrian Orr is warning the Government's flagship KiwiBuild policy could "crowd out" the private sector.

But Finance Minister Grant Robertson disagrees, saying Orr's forecast was "certainly challengeable".

This morning, the Reserve Bank published a discussion document. It says KiwiBuild could contribute 100,000 affordable houses over 10 years, but it's unlikely that will be achieved without crowding out a "significant amount of other residential construction activity".

And Auckland house sale prices have hit their lowest levels in three years.

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The country's 16 polytechnics are set to become one, under a radical shake-up of the tertiary sector.

Education Minister Chris Hipkins has released a wide-ranging plan, aimed at getting more school leavers into good jobs.

It will see a single national body to take over all polytechnics, apprentices and industry trainees.

The institutes will merge to form the New Zealand Institute of Skills and Technology.

That new body will take over all of New Zealand's 110-000 polytechnic students and 140,000 apprentices and industry trainees.

The institute will also take over programme design and administration for all campuses of what are now 16 separate polytechnics, as well as enrolling and managing apprentices and trainees from the now 11 industry training organisations.

Also today, a sterilisation botch-up in Hawke's Bay has left 55 surgical patients potentially being exposed to serious diseases including HIV and hepatitis, and the Salvation Army reveals its annual State of the National report, showing a huge gap between the wealthy and the poor.

Hosted by Juliette Sivertsen.

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The New Zealand-China relationship continues to come under the microscope as it's thought diplomatic links have plummeted to a new low.

Prime Minister Jacinda Ardern was scheduled to visit China early this year, but the invitation has been put on hold.

And this morning, the Herald revealed the 2019 China-New Zealand Year of Tourism was meant to be launched with great fanfare at Wellington's Te Papa museum next week, but that has been postponed by China.

That initiative was announced by the Key Government almost two years ago when Chinese Premier Li Keqiang was in Wellington.

The Ministry of Business Innovation and Employment says China has advised that this event has had to be postponed due to change of schedule on the Chinese side.

Officials are now working with China to reschedule the opening.

But it's thought that China sees New Zealand as taking sides with the United States, after the Government's chief spy agency, the GCSB, axed the Chinese telco giant Huawei from the Spark 5G broadband rollout.

The Trump Administration publicly asked its Five Eyes partners not to do business with Huawei.

Philip Burdon, a former National Government Trade Minister and recently chairman of the Asia New Zealand Foundation, says New Zealand can't afford to take sides.

He believes China feels slighted by New Zealand over the decision to block Huawei.

Also today, junior doctors go on strike, two men are charged over the December murder of Shannon Baker and Cocksy's last laugh.

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Malcolm Rewa has gone on trial today - charged for the third time with killing Auckland woman Susan Burdett 27 years ago.

Chief High Court judge, Justice Geoffrey Venning, acknowledged many in the jury would have heard parts of the case before, particularly because of the high-profile connection to Teina Pora.

The case found infamy when Teina Pora was twice wrongly convicted for murdering Burdett.

He spent 22 years in prison before the Privy Council quashed his conviction in 2015 and has since received an apology from the Government and $3.5 million in compensation.

A stay of proceedings for a murder prosecution against Rewa was applied by the Solicitor-General in 1998, but in 2017 the Deputy Solicitor-General, on behalf of the Attorney-General, reversed the stay.

A stay had never before been lifted in New Zealand's legal history.

And new hope on day seven of the Nelson fires, as Wakefield residents are allowed back into their homes.

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The country's polytechnics are in for a shake-up.

Jacinda Ardern gave her 'State of the Nation' speech to a business audience this morning, outlining the economic challenges facing New Zealand, and foreshadowing a major restructure of polytechnics and institutes of technology.

The restructure is to be released next week.

It's expected to recommend turning the vocational education sector into a flexible network, which focuses on greater cooperation between institutions to meet the needs of business.

Polytechnics and institutes have cost the Government 100 million dollars in recent bailouts.

Ardern told the business audience the reforms would be far reaching.

She said the system was struggling, and had been left to drift and muddle through.

She questioned why at a time when they're facing critical skill shortages, polytechs and institutes are going broke.

Also today, more evacuations have taken place as the Tasman wildfire continues to rage out of control.

The town of Wakefield has been evacuated, and now more families have been forced from their homes in Nelson City, after a new fire broke out.

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The Prime Minister says as she flew into Nelson she could see the true scale of the massive Tasman bush fire. Jacinda Ardern has met emergency services battling the blaze in Pigeon Valley today.
Ardern says trying to control the fire is a massive undertaking.
Incident controller John Sutton says it's almost certain the fire was the result of agricultural machinery. He says it was a highly accidental event with a totally unintended consequence.
While yesterday had been a good day, making progress in containing the fire, the firefighters had a lot of work ahead of them. Sutton said some firefighters were experiencing fatigue and they were trying to fly in more firefighters.
Also today: unemployment figures have risen higher than expected, and the Grace Millane murder-accused continues to fight to keep his name secret.

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A massive blaze in Tasman continues to ravage the district.
And, authorities are scrambling after a second fire has broken out in the region, at Rabbit Island.
The fire in Pigeon Valley started yesterday afternoon but doubled in size overnight, spreading to cover 1870 hectares within a perimeter of 20kms by 3am.
A Civil Defence state of emergency has been declared.
Sources have told the Herald the fire's thought to have been sparked by a farmer ploughing his field.
The Nelson District Council says 170 homes have been evacuated near Pigeon Valley
Further evacuations are now taking place near Rabbit Island.
There have been no reports of injury.
However, there have been some animal welfare issues and at least 13 animals have had to be euthanised.
Also today, hundreds have gathered at Waitangi today to mark the 179th anniversary of the signing of the Treaty of Waitangi.

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